Hearst Corporation

About Hearst Corporation

Like founder William Randolph Hearst's castle, The Hearst Corporation is sprawling. Through Hearst Newspapers, the company owns some 15 daily newspapers (such as the San Francisco Chronicle and the Houston Chronicle) and 35 weekly newspapers. Its Hearst Magazines publishes more than 300 global titles, including major US consumer magazines such as Cosmopolitan – more...and Esquire. Hearst has broadcasting operations through its Hearst Television subsidiary. Its Hearst Entertainment & Syndication unit includes syndication service King Features, newspaper production service Reed Brennan, and stakes in cable networks (A&E, ESPN). The Hearst Corporation is owned by the Hearst family, but managed by a board of trustees.

Operations

Hearst publishes information for automotive, electronic, pharmaceutical, and finance industries through its Hearst Business Media segment. Through its Hearst Interactive Media unit, the company makes strategic investments in online properties such as Brightcove and BuzzFeed and has a minority stake in entertainment network UGO Entertainment.

The company publishes about 20 magazines in the UK through subsidiary The National Magazine Company. Hearst's top magazine title, Cosmopolitan, is published in about 35 languages and sold in more than 100 countries, making it the largest magazine franchise in the world.

Mergers and Acquisitions

Hearst Magazines in 2011 acquired the international magazine business of French media company Lagardère for some $919 million. The deal consisted of more than 100 titles in 15 countries, including magazines published through Hachette Filipacchi Media U.S.. Hearst acquired the non-French editions of magazines such as Woman's Day and Elle, which complement existing Hearst titles such as Good Housekeeping and Cosmopolitan. The additions from Lagardère boosted Hearst Magazines' global reach, making it the second-largest US magazine publisher by circulation after Time Inc.

Hearst is also making progress on the digital media front by diversifying into digital marketing services. In 2010 it acquired iCrossing, one of the world's biggest independent digital marketing services providers, for about $325 million. (A testament to iCrossing's value, Hearst had initially bid $250 million for the company, but the marketing firm rejected that offer as too low.) Hearst is using the deal to add to the services it offers its advertising clients, such as search ads, mobile, e-mail, social media campaigns, website development, and display and rich media creation.

Geographic Reach

In 2011, Hearst Corporation announced that it is establishing corporate office in Beijing. China is an important market for the company's magazine business, and a direct presence in the country will present numerous opportunities for other Hearst divisions to invest and build businesses there.

Strategy

Hearst has had success keeping costs down and managing the transition from print to digital. Hearst Magazines formed a unit called Hearst Magazines Digital Media, through which it had published more than 50 apps and digital editions of its magazines by 2011. Included in the enhanced digital issues for the iPad, iPhone, iPod Touch, and Droid platform is special content and games based on its brands. These efforts follow Hearst's formation of a joint venture with Advance Magazine Publishers (dba Condé Nast), Meredith, News Corp., and Time Inc. to offer a new digital storefront and portable reading experience. The venture, called Next Issue Media, launched in 2011.

On the TV front, in 2011 Hearst entered into a joint-venture partnership with Mark Burnett Productions. The deal gave Hearst 50% of the TV production firm, as well as all the future programs it produces. (It did not give Hearst ownership of existing reality hits Survivor and The Apprentice.) Burnett made the deal to gain capital for generating new projects, while Hearst used the partnership to acquire more nonfiction entertainment that it can distribute content across its multiple platforms.

Company Background

Company Chairman George R. Hearst, Jr., is a grandson of founder William Randolph Hearst. Although the company no longer owns Hearst Castle (deeded to the State of California in 1951), it has extensive real estate holdings. Projects include the Hearst Ranch in San Simeon, California, and the Hearst Tower in New York. In addition, The Hearst Foundation and the William Randolph Hearst Foundation are independent private philanthropies operating separately from The Hearst Corporation.

Upon his death, William Randolph Hearst left 99% of the company's common stock to two charitable trusts controlled by a 13-member board that includes five family and eight non-family members. The will includes a clause that allows the trustees to disinherit any heir who contests the will. – less